Customs valuation of liquid bulk imports excludes pre-import loss and post-arrival charges from the duty base.

Customs duty on liquid bulk imports is stated to depend on the quantity that actually completes import, not on goods lost, pilfered, or destroyed before import is complete, so duty cannot be levied on quantities that never landed in India. The text also states that charges incurred after arrival at the Indian port, including post-importation demurrage-type costs, do not form part of the assessable value because they arise after importation and are outside transaction value for customs purposes. On that basis, the demand is described as unsustainable and consequential relief follows.

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Issues: (i) Whether duty on liquid bulk imports was chargeable on the quantity landed in India or on the quantity declared as loaded on the vessel; (ii) Whether charges recovered after the goods reached the Indian port could be included in the assessable value.

Issue (i): Whether duty on liquid bulk imports was chargeable on the quantity landed in India or on the quantity declared as loaded on the vessel.

Analysis: The issue was covered by the settled legal position that customs duty is not leviable on goods that are lost, pilfered, or destroyed before import is complete. The relevant statutory scheme and the valuation rules do not permit duty to be levied on the basis of goods that never reached the stage of completed import. Accordingly, quantity actually landed cannot be substituted for the declared loaded quantity where loss occurs prior to completion of import.

Conclusion: The issue was decided in favour of the appellant.

Issue (ii): Whether charges recovered after the goods reached the Indian port could be included in the assessable value.

Analysis: Charges such as demurrage incurred after the goods reached the Indian port arise only after importation and are therefore post-importation events. Such charges do not form part of the transaction value for customs valuation purposes and cannot be included in assessable value on that basis.

Conclusion: The issue was decided in favour of the appellant.

Final Conclusion: The demand was unsustainable on both counts and the appeals were allowed with consequential relief.

Ratio Decidendi: Customs duty and assessable value are governed by the completed import and transaction value principles, so post-importation losses and charges incurred after arrival at the port cannot be included in the duty base.

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